How Google became the world’s leading AI player
A decade of strategic AI investment and infrastructure gives Google a decisive edge in the AI revolution, propelling it past Apple to become the world’s second-most valuable company for the first time since 2019.
The current AI revolution is often associated with the public debut of ChatGPT by OpenAI in November 2022. But its true origins go further back, rooted in Attention Is All You Need, a paper published by eight Google researchers in 2017, which laid the technical foundations for developing large language models (LLMs) and other components of today’s AI revolution.
The conventional wisdom is that ChatGPT caught Google off guard, unprepared for the upheaval it triggered. The reality, however, is that Google has long been at the forefront of AI, with leading experts and organizational infrastructure ready to adapt, overcome initial setbacks, and make rapid breakthroughs. This preparedness, and the success it has enabled, is a major reason the company’s market value continues to rise. Last week, for the first time since 2019, it surpassed Apple’s.
As of Wednesday’s close, Google had a market capitalization of $3.97 trillion, second only to Nvidia at $4.49 trillion. Apple trailed in third place with $3.83 trillion.
How has Google not only maintained its position but also emerged as a leader in AI, despite doubts about its future? Here are six key factors.
1. Google has always been at the forefront of AI
Google invested in AI before many others, embedding capabilities into products like Gmail (spam filtering), YouTube (recommendations and ads), and its search engine (autocomplete). Smart acquisitions further strengthened its position. In 2014, Google acquired DeepMind, bringing in prominent AI researchers led by founder Demis Hassabis. A year earlier, it acquired DNNresearch, founded by Geoffrey Hinton and Ilya Sutskever. (Sutskever later left to co-found OpenAI; Hinton won a 2024 Nobel Prize in Physics.)
These minds advanced Google’s AI research and products. The 2017 Attention Is All You Need paper is one example. Another is the Lambda chatbot, an early conversational AI predecessor to ChatGPT. In June 2022, one Google engineer claimed that, after long conversations, Lambda seemed like “a 7- or 8-year-old kid who understood physics.”
While ChatGPT’s launch initially caught Google slightly off guard, the company had the infrastructure, talent, and institutional knowledge to respond rapidly. Bard (now Gemini) initially suffered glitches and errors, but Google quickly closed the gap, ultimately surpassing OpenAI with Gemini 3 in late 2025. This was the result of more than a decade of strategic preparation, an advantage Apple lacks in its current AI push.
2. Google’s cloud is raining money
The AI revolution has created huge demand for AI infrastructure. Companies like Meta, Apple, and OpenAI can build their own systems, but many rely on cloud providers. Google, alongside Amazon and Microsoft, is a major player. Its existing infrastructure allowed it to scale rapidly, capturing much of this demand. In Q3 2025, Google Cloud revenue jumped 34% to $15.2 billion, with AI offerings cited as a key growth driver.
Google’s Tensor (TPU) chips, now in their seventh generation, compete with Nvidia and power platforms for Meta and Anthropic. Analysts estimate that a spinoff of Google’s chip and DeepMind units could reach a trillion-dollar valuation, proof of long-term strategic planning that began as early as 2013.
3. It knew when to go into emergency mode
Infrastructure alone is not enough; timing matters. ChatGPT’s arrival marked a market-changing moment. CEO Sundar Pichai declared a “Code Red,” and founders Sergey Brin and Larry Page returned from semi-retirement.
Page led strategy sessions; Brin established a workstation in the AI labs to drive technical initiatives. Google also lured back key talent like Jonathan Ross (early Tensor engineer) and Noam Shazeer (co-author of Attention Is All You Need). Leveraging its infrastructure rapidly and strategically was as crucial as having it in the first place.
4. Traditional operations haven’t collapsed
Some feared AI chatbots would render search engines obsolete, harming Google’s primary revenue source. Yet, in Q3, search revenue rose 14.5% to $56.57 billion. Gemini AI integration into search boosted engagement, results with AI reviews generated 10% more follow-up searches. YouTube advertising also increased 15% to $10.26 billion, with 300 million paying subscribers across premium services.
Even if search’s role diminishes in the long term, it currently generates significant revenue and provides time to develop new business models.
5. One of the main threats was neutralized
In summer 2025, Google faced a potential crisis: U.S. courts had ruled it a monopoly in search and digital advertising, raising fears of being forced to sell Chrome and Android or restrict key deals with Apple. In September, the decision largely favored Google: it avoided a breakup and could continue key deals. Minor remedies were imposed, and further antitrust challenges remain pending. This effectively removed a major legal threat.
6. Small activities become big
Google’s “other bets,” long-standing non-core ventures, are finally showing results. Waymo, the self-driving car division, now operates robo-taxis in multiple U.S. cities and is seeking $15 billion in funding at a $110 billion valuation. Years of investment are beginning to pay off, supporting Google’s overall market value.
Google’s success is no accident. It reflects strategic, long-term building, diverse complementary services, and rapid, decisive leadership responses. Despite lingering challenges, the company is well-positioned to maintain its AI dominance.
